Michigan taxpayers are footing the bill for some of the most expensive state employee health care benefits in the nation. The monthly premium for Michigan state worker family coverage is 24 percent above the national average for state government workers. Yet the employee share of that expensive premium is 43 percent below the national average (even after the employee share doubled in the last year).
Those are the conclusions from the latest National Conference of State Legislatures benefits survey, published in August. See the numbers for yourself.
That stark comparison, combined with the Center for Michigan’s recent study suggesting cost savings in other states with insurance pools, raises significant questions for a legislative panel considering House Speaker Andy Dillon’s pooling proposal:
Critics have discounted The Center’s study because it did not review the dozens of complexities and coverage options available in the seven key pooling states we compared to Michigan. We understand that coverage levels are the top concern of public workers. But from a public policy perspective, the top concern must be the cost of the benefits.
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While the CFM seems to enjoy publishing article after article about studies such as this one “More evidence of Michigan’s high benefits costs” attention must be paid to the fact that there are just as many studies and statistics available showing that Michigan State employees are not receiving the same quality of healthcare benefits that many other state’s employee’s have access to. Further, and most important here, are the numerous studies and analysis that show clearly and plainly that state employees earn only a fraction of what their private enterprise counterparts are paid. It is simply illogical and unreasonable to expect state employees to pay the same or similar amounts for healthcare as their private enterprise counterparts when they have sacrificed higher wages in service of the people of Michigan. Loss of reasonable healthcare coverage for state employees equals loss of talented and intelligent individuals in civil service. That said, the real reason I am taking the time to write this is that I am offended at how one sided CFM’s reporting on this topic has been. If you are going to report studies such as the one at least include the whole story, tell the whole truth. Provide your readers with all of the information that they need to be informed participants in this debate.
And also fails to recognize the pay increases state workers have many times negotiated away over the years in trade for maintaining their health care benefits. What about state retirees who served the state faithfully for entire careers, when they could have made lots more money in the private sector, on the promise of heath care when they retire? Pensions were formulated based on these benefits. Do you support increasing retiree pensions to compensate for the broken promise of reduced health care?
Again, your editorial energy spent on attacking state employees would be better spent on doing a more balanced discussion of the issues.
Jenni -
Most who pay taxes will agree that we want to have a strong workforce of employees to serve us in Michigan. However, when you compare to private enterprise, you will normally lose.
There are so many areas where the government could contract out these state jobs for far less than what we taxpayers currently pay for public salries and benefits. IN those cases where its not feasible, there is still going to be a problem when a public employeee receives a much lucrative health benefit package than we taxpayers do.
Other states do not operate that way, and neither should Michigan. Especially in these times, the state workers, teachers, unions need to step back and asses if they will be better off with significant cuts in benefits now, or losing their jobs tomorrow. It will happen, unfortunately.
This has been going on in the private sector for years, especially here. No one in my company has had a wage increase in the last 4 years…..has that been the case with state workers? We are paying much more for health andother benefits each year….is that the case with state workers? Time to really understand the economics of the state governement.
Seth -
again, you make some good points.
However these are issues that everyone has to deal with. health care has been increasing for all.
Retirees from public or private careers are not guareanteed free health care for life. Private retirees face the same issues. Again, why should public employees/retirees have a better plan than all the taxpayer retirees? It just does not make sense or cents !
And, consider proposals like Dillon’s that will save the state and taxpayers funds needed elsewhere….and allow retirees and workers to have reasonable benefits.
Jenni & Seth….Thanks for speaking up!
Everyone wants the governmental employees to have the same as the private….go ahead, but get your checkbook out, because you need to pay your average management type employee $20,000 to $30,000 more per year to equal the private sector. This is why governmental employees have enjoyed their nice benefits, because they sacrificed the higher pay. Also, note that governmental employees do not get bonuses, do not have parties thrown by their employer, and any other extra perks that private sectors employees receive. This is a violation of allowable expenses. Also in the 90’s when all the private sector individuals were seeing large pay increases, I’ll bet you’ll find on average the percent of pay increases for governmental union employees was still way below what the private sector was receiving. One additional comment…please don’t lump in all governmental employees to having cadillac benefits. There are a lot of local agencies that have made drastic cuts to their health insurance packages, including higher deductibles/copays AND making their employees pay a share of the premium. Dillon’s plan seems aimed at the State and School Teachers. Maybe they are fortunate enough to still have cadillac benefits, but not all governmental agencies are in the same boat.
The biggest issue that everyone is missing here is where the problem lies. If insurance costs $100 and presently the employer pays $90 and the employee pays $10, and in the future the employer pays $60 and the employee pays $40, you haven’t solved the problem. THE INSURANCE IS STILL $100! At the National and State level, everyone needs to start figuring out why costs for health insurance are so expensive and attack the problem from that angle.
Once again, we attack state employees and teacher benefits. They seem to be the scapegoats for all of our state’s budget problems.
I agree with Jenni. Low pay lousy benefits = loss of our most talented and intelligent state workers to the private sector. Who do you want teaching your child?
If Andy Dillon wants to reform my healthcare, I hope he also plans to reform his healthcare. Anything good enough for Mr. Dillon, will probably suit me. Some how I doubt our legislators plan to take the deep cuts to healthcare that they are proposing for the rest of us. Ironic.
I am not a state employee and I fail to see a problem here. If you are looking for waste in our state government, please look elsewhere. This is not waste, but legitimate benefits for people who deserve it.
John,
I am a retire Michigan school teacher and I acknowledge that MPSERS provides me and my fellow retirees with health benefits that are better than almost every other state. I am naturally concerned that those benefits not be reduced, but I am equally concerned that an unfair burden not be placed on tax payers to maintain them. But rather than reducing those benefits. I would rather see if we could make a better use the money to extend the same benefits to all tax payers.
Andy Dillon’s pooling proposal seems to be an attempt to lower the burden. He recognizes that by pooling a greater amount of money can be created, with which more can be done for less overall cost – sort of the whole being less than the sum of it’s parts.
Its ironic that if Congress and the President had understood that, they would see that a single-payer national health insurance plan could provide everyone coverage for what ever need, whenever it might occur. The cost (at worst) would be what we are currently spending and for most tax payers would be far less than what they are currently paying, whether they are insured or not. In fact, Dillon’s proposal wouldn’t be needed and tax payers would also be relieved of paying the extra costs for duplicate programs such as SCHIP, Medicaid etc.
The myth that all teachers have CADILLAC healthcare benefits is FALSE. We pay monthly premiums just like everyone else, along with co-pays and higher prescription costs. The days of MESSA Supercare have been long gone for most districts.
Why aren’t we focusing on the insurance companies inflated premiums? Every year, we too bring home less while paying out more.
As a small business owner in Michigan for over 20 years I can tell you first hand that a benefit once given is doublely difficult to cut or eliminate when company revenues cannot sustain its cost. That said, employees at small businesses often are very cognizent of their employer’s financial condition and understand that it is not in their best long term interests to kill the golden goose. The reasonable choices available are to bite the bullet or migrate. Most also recognize that salary/benefit levels of their counterparts at other companies in Michigan or other states … or India for that matter … have -0- relevance to their situation. Individual companies have finite resources — tied directly to revenues and essential costs — to invest in salaries and benefits. All the wishful thinking in the world cannot change that basic law of economics. The plea that somehow state government employees are or should be immune to this reality is both shortsighted and self-serving. Until the day arrives that significant tort reform and increased competition drive down healthcare and thus health insurance costs, every employee in Michigan — private and public sector alike — will continue to suffer the financial consequences. As I see it, Dillon’s proposal offers the most balanced solution to both public employees and the taxpayers of Michigan. Any staff migration that might result from right-sizing the state’s employment levels and compensation plans is no more detrimental than that being experienced by Michigan’s private employers. Another reality check from Small Business 101: No one is irreplaceable.
I always hear about tort reform and some of it is a fine thing. Frivolous lawsuits tie up our court system. I challenge anyone here though that you would not want to put up with a small, capitated sum if you lost your arm in an industrial accident. What insurance companies want you to believe is that every lawsuit is frivolous. They put the ones on display that are the most ridiculous. This way they can sell the average person, who researches nothing for themselves anymore because they have the spinmeisters doing that for them, on the idea that every lawsuit has no merit. If you are the one who has to live on nothing but disability for the rest of your life then you would not be singing for limits on settlements. I was seriously injured in an accident that left me crippled for a few years. The out-of-pocket expenses on my part were almost $80,000. I sued to get my money back, not to get rich. Most people have no idea that you can only collect the limit of the policy holders insurance. We don’t bother to cap the profit that insurance companies make. Why should we cap what an injured person makes when we the accident has taken away their earning power for life? They did this in Texas and it has had no impact on the rising cost of health insurance. As usual the insurance companies are liars. What we need is health care reform to instill competition to lower costs.